Small Loss In The Big Picture
After rallying on China trade headlines during Monday nights Globex session, the S&P 500 futures (ESZ19:CME) traded sideways/lower during Tuesday’s regular trading hours. The ES took out the Globex low at 3074.00 just before 10:00 a.m. CT, and printed a new low at 3069.75, before spending the rest of the day grinding in an 8 handle range.
Going into the close, when the MiM reveal came out showing $475 million to buy MOC, the futures were trading right around 3075.00. After a quick dip down to 3071.25, the ES went on to print 3072.75 on the 3:00 cash close, and 3071.75 on the 3:15 futures close, down -4.00 handles for the day.
In terms of the ES’s overall tone, the markets felt weak, but there weren’t any real significant losses. In terms of the days overall trade, volume was on the light side again, with 1.12 million e-mini S&P futures contracts traded.
S&P Cash
The S&P 500 closed on Tuesday at 3074.62, six points below its opening print of 3080.80, after closing Monday at 3078.27. Its trading range (3072.15 – 3083.95) did little to help traders out remaining in a pretty narrow range. The fact that the markets tested Monday’s high and low while closing lower is not a good sign. Despite many analysts calling for new highs, some consolidation is more than likely in order.
With little to no news to drive the equation, the markets remain in a tight range with little on the horizon to change the circumstances. Maybe this will give some of you the opportunity to look at other commodities outside of the equity index realm. While there are plenty to work with, we’ll continue with the Dollar and natural gas.
The Dollar
We continued to add a few more short Dollar contracts today on the rally. The Dollar broke back through its 20-day moving average, but did not continue its runs overnight. It would be nice if Europe and the U.K. would get their acts in order, but that is only a matter of time. Hopefully the Brits aren’t trying to overturn an election as our House of Representatives are. The Euro is a different story, but unlikely to trade lower given the overall outlook has improved. If you have access to ICE, trade DX 12-19; it’s the best one to learn with.
Natural Gas
One of my favorite sayings, “I’d rather be lucky than good; the harder I work the luckier I get,” rings true with natural gas. This is one of the largest start of the season rallies I’ve seen in years. We still have no reason to take profits and will continue to add upon any sizeable decrease. Winter is coming.
I need to remind myself that I’m too old to be driving from western Canada to Texas. Then again, as traders we all should listen to ourselves more often. Thanks for the emails. If I can keep my eyes open, I’ll respond to a few before I go to bed.
Wish I was able to get started with all who “want to learn,” but it is just not possible. Hopefully by the middle of next week everything, including the Internet, will be installed.
Keep emailing me at david@amstrdinggroup.com and let me know what you want to hear about. Thanks for reading what we post. Enjoy your trading.
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As always, please use protective buy and sell stops when trading futures and options.
Disclaimer: Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. Any decision to purchase or sell as a result of the opinions expressed in the forum will be the full responsibility of the person(s) authorizing such transaction(s). BE ADVISED TO ALWAYS USE PROTECTIVE STOP LOSSES AND ALLOW FOR SLIPPAGE TO MANAGE YOUR TRADE(S) AS AN INVESTOR COULD LOSE ALL OR MORE THAN THEIR INITIAL INVESTMENT. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.
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